Bethlehem entertainment tax will burden nonprofit arts groups

MORNING CALL File Photo

The Nutcraker, performed by the Ballet Guild of the Lehigh Valley and Pennsylvania Youth Ballet at Zoellner Arts Center in Bethlehem in 2012, is the kind of production that is subject to Bethlehem's entertainment tax.

The Nutcraker, performed by the Ballet Guild of the Lehigh Valley and Pennsylvania Youth Ballet at Zoellner Arts Center in Bethlehem in 2012, is the kind of production that is subject to Bethlehem's entertainment tax. (MORNING CALL File Photo)

Opinion: How Bethlehem entertainment tax would harm nonprofit groups

The Morning Call article by Nicole Radzievich did not represent the challenges that Bethlehem nonprofits face in light of the entertainment tax hikes for the city.

The city of Bethlehem needs to differentiate the Sands Bethlehem Event Center, a multimillion dollar, for-profit commercial venture, from the dozens of much smaller not-for-profit arts organizations that are dramatically impacted by additional costs to our valued patrons whom we have cultivated for decades.

We ask the city to acknowledge the impact of services that we provide to students of all ages who could be affected by this tax. The city should also recognize that this tax will affect dozens of local small businesses, such as the Ballet Guild of the Lehigh Valley, Nardi School of Dance and Touchstone Theater, all of which continue to struggle financially and use Bethlehem facilities and services of local arts centers and venues like Zoellner Arts Center and Moravian College.

We fully acknowledge that the casino and the event center are tremendous assets for creating jobs, bringing in tourism dollars and creating tax revenue for the city. We further acknowledge that the city of Bethlehem is facing very difficult decisions that will affect jobs and vital services and is looking for solutions and help from all its constituents.

We also appreciate that The Morning Call brought to light certain pros and cons; however, the article missed key points about harder issues that not-for-profits and small businesses have to contend with, which make this tax more difficult on us.

We all face increasing regional competition for ticket dollars and acquiring the best arts and entertainment, as patrons will routinely travel from New Jersey and the Philadelphia suburbs to the annual Bach Festival, Zoellner Arts Center and many of the other smaller arts organizations.

But beyond the competition there are major differences in the business models and missions that significantly separate us from the Sands Event Center. The most important is that we are not-for-profits actively engaged in seeking sponsorships and donations to support our missions. Without these vital nonticket resources, which can often make up more than 50 percent of annual income, our operations would not be viable.

In a time when arts education is being cut, the not-for-profit arts and small businesses have stepped up by developing hundreds of effective education and outreach programs at low or no cost to our public schools and inner-city youth programs. Similarly, many of us are also serving economically disadvantaged students and patrons, and that often means subsidized tickets — the key word being subsidized. Though these mission-driven services are not taxed, they rely on donations.

Most donors tend to view their overall support to the arts as including the tickets they buy, especially donors who give less than $500. It becomes increasingly difficult to ask for donations in the tough economy when the cost of attending events is increasing, but the organization isn't getting the additional revenue because it is being redirected to pay the entertainment tax.

For many local arts organizations, the mission includes artistic experimentation that, like pure scientific and technological exploration, doesn't always translate into ticket revenue. There are many additional differences in our operations, such as limitations on the ability to earn revenues outside of our mission, which can also be taxed.

All of these factors must be accounted for when comparing the nonprofits with a for-profit, independent, commercial organization whose primary purpose is to generate ticket sales for the event center and people to go into the casino, its mall and its restaurants.

It's also important to note that The Morning Call erroneously reported that the tax is only applicable when audience size is 200 or more, when in truth the tax is applicable to a venue's capacity of 200 or more.

The not-for-profit arts organizations and small performing arts business in Bethlehem are just as important to the brand, education, business partnerships and community engagement of our great city, as well as the Lehigh Valley.

In addition to the casino, we also raise the standard of living in the area, provide entertainment and generate related business revenue. But we also promote learning opportunities, give local citizens the opportunity to participate in the arts, and develop different artistic disciplines.

Nonprofits must be viewed differently from the Sands Bethlehem Event Center, both in our business models, our missions, and as fragile but vital small businesses that contribute to the betterment of our local community.

Andrew Cassano is administrative director of Zoellner Arts Center; Bridget George is executive director of the Bach Choir of Bethlehem; Jennifer Altemose is president of the board of directors of the Ballet Guild of the Lehigh Valley; and Christine Roysden is treasurer of the board of directors of the Chamber Music Society of Bethlehem